Editorial: GM shows way toward new mix

Published on January 20, 2003.

General Motors Corp., the nation's largest advertiser, is putting less emphasis on "traditional" advertising. As was reported last week in these pages, and in our sibling publication Automotive News, GM says traditional media's share of its marketing budget has fallen to about 60% today from up to 75% five years ago. It's a clear reminder that even the No. 1 ad spender sees advertising as just one component in an expanding mix of marketing avenues.

GM, of course, is still a giant investor in traditional media, primarily TV and print. Its spending in measured media, on cars and light trucks, came to $1.6 billion in the first 10 months of 2002, up 6% from the same period in 1998, according to Taylor Nelson Sofres' CMR.

But GM, the No. 1 U.S. ad spender, has reapportioned its marketing budget to put more money into relationship marketing, including sponsorships and the Internet. GM is looking for ways to better target customers, and it's a lot easier to identify prospects when they visit its GM Web sites than when they view its TV commercials. When GM's massive incentives spending (an estimated $3.5 billion last year) is factored in, traditional media's share is even smaller, accounting for less than one third of combined marketing and incentives spending.

Critics may question the emphasis on incentives, but a reinvigorated GM knows how to sell. We are doing what not long ago would have been unthinkable: holding up GM as an example of a marketing leader whose strategies merit attention.

Traditional media can hold on to hefty shares of marketing budgets, but better targeting and ad alternatives, such as tying sponsors into entertainment content, are increasingly important for them. What percentage of a marketing budget should go to advertising now vs. five years ago? There's no one answer. But GM, serious about "mix," is smartly spreading its budgets around. It's a path others will follow.